Many countries – particularly developing nations in Asia and South America – are struggling to keep the lid on their currencies as the falling dollar means their currencies have been rapidly appreciating thereby making their exports more expensive. In a bid to support the faltering dollar, central banks for the affected countries have been buying dollars on the open market in order to increase demand for the greenback.
“We have to be careful that our exchange rate doesn’t appreciate too much as to deindustrialize the country,” Marcos Verissimo, chief of staff at Brazil’s state development bank known as BNDES, said yesterday at a conference in Sao Paulo. “The capital goods industry has suffered tremendously.”
Bloomberg